Bonini, Patricia and Da Silva, Sergio (2007): Staggered wages, inflation, and discounting.
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In the literature of staggered wages (Taylor, 1979, 1980; Blanchard, 1986; Ball and Cecchetti, 1991) the discount factor is neglected in the workers’ loss function. Yet discounting is to be viewed as an extra piece of micro-foundation with implications for discretionary monetary policy. We revisit the issue and show that discounting in the model of staggered wages actually lowers the time consistent steady inflation.
|Item Type:||MPRA Paper|
|Institution:||Federal University of Santa Catarina|
|Original Title:||Staggered wages, inflation, and discounting|
|Keywords:||Staggered wage model; Time consistent steady inflation; Discounting|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation
E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian
|Depositing User:||Sergio Da Silva|
|Date Deposited:||03. Mar 2007|
|Last Modified:||12. Feb 2013 05:36|